The Bombay High Court confirmed deletion of disallowance under Section 69C of the Income Tax Act, 1961 on satisfactory discharge of burden of proving genuineness of transactions. The respondent in the present matter is Sanjay Dhokad.
The appeal is filed under Section 260A of the Income Tax Act 1961, against the order passed by the Income Tax Appellate Tribunal, Mumbai which while dismissing the appeal of the Revenue, has upheld the order of the Commissioner of Income Tax (Appeals), Mumbai, which directed the deletion of the disallowance for the amount of Rs.4 crores under Section 69C of the Income Tax Act, as was directed by the Assessment Officer.
Relying upon certain statements of the proprietors of the 21 Firms referred to in the notice, and since none attended or made any submissions on behalf of the assessee after receiving a show cause notice, the Assessing Officer presumed that the assessee had nothing to say and that the said purchases should be treated as his income.
The Assessing Officer passed the assessment order treating the entire amount of Rs.4 crores as unexplained expenditure under the provisions of Section 69C of the Income Tax Act, and added this amount to the total income of the assessee, and in consequence of this order, initiated penalty proceedings under Section 274, read with Section 271(c) of the Income Tax Act, for furnishing inaccurate particulars of income and conceal income.
On the Respondent challenging the order of assessment the Commissioner of Income Tax (Appeals), allowed the same holding that the Respondent had proved the transactions by producing his books of accounts, banks statements and proved that the payments had been realized. The same was upheld by the Appellate Forum.
The Coram comprising Justice Dhiraj Singh Thakur and Justice Valmiki Sa Menezes observed that “The Appellate Tribunal was right in applying the ratio of the judgment in The Commissioner of Income Tax-1, Mumbai v. M/s Nikunj Eximp Enterprises Pvt Ltd to the facts of the present case. There are concurrent findings arrived at by the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal, on the fact that the Respondent had satisfactorily discharged the initial burden of proving the genuineness of the transactions.”
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